SANTIAGO, May 27 (Reuters) - Codelco, the world's biggest copper producer, boosted output and cut cash costs in the first quarter, even as a steep drop in metals prices prompted the Chilean state-run company to post a $151 million pre-tax loss.

Production from Codelco's wholly-owned mines rose to 437,000 tonnes, 11 percent higher than a year earlier, mostly due to increases at its century-old Chuquicamata mine and also its newest deposit, Ministro Hales. Its Salvador, El Teniente and Radomiro Tomic mines also helped to boost production.

Including Codelco's stake in the El Abra and Anglo American Sur mines, total first-quarter copper production was 470,000 tonnes.

Codelco is tasked with the delicate balancing act of pushing forward with a multi-year plan to upgrade its aging mines and open new ones, while slashing costs in the wake of a steep fall in the price of copper.

In that vein, Codelco said it reduced direct cash costs, a measure for the cost of producing copper, to $1.25 per pound in the first quarter, an 8 percent drop versus a year earlier.

Codelco's chief executive officer said at a press conference following the release of results that he projected copper prices averaging around $2.17 per pound this year. (Reporting by Fabian Cambero; Writing by Anthony Esposito; Editing by W Simon)